Being a WISP looking for investors to help expand, this news has crushed two potential deals just today, and possibly the third and final one on my table this weekend if I can't spin it correctly.
IMHO, this is GOOD for the industry, but not for individual WISP cases where they might be trying to convince people that the model is worth it. -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Tom DeReggi Sent: Friday, November 09, 2007 2:46 PM To: [EMAIL PROTECTED]; WISPA General List Subject: Re: [WISPA] Sprint and Clearwire scrap WiMax deal Todd, > If Clearwire went away tomorrow, small WISPs, WISP distributors and WISP > product manufacturers would be far better off. Yes, I agree, WISPs would be much better off, if Clearwire disappeared. Yes, Sure if Clearwire is severally harmed financially by this, and they are slowed, WISPs will benefit. My view was based on the fact that Clearwire isn't going to disappear. My view was based on that a Clearwire/Sprint partnership is not required for Clearwire or Sprint to have success in Mobile/Fixed Wireless. This news was a failure of a partnership, not a failure of a company or competitor. Actually, we are now left with two potential competors.... a Sprint and a Clearwire. It could create a situation where Sprint and Clearwire compete against each other to lower market price and be more of a threat to WISPs. Sure a combined entity is would result in a stronger more complete coverage company under one umbrella, but that is a advantage for stock holder's, and a bad thing for Wisps, not necessarilly the worst thing for WISPs. There is another factor called "competition". It is not CableCos or Ilecs that hurt WISPs, it was the competition between the Cable Cos and Ilecs, that drive the price down and the speeds up, and that hurt WISPs worse. Competition between two large dominient telco Wireless provider, will hurt WISPs worse. Secondly, jsut because Clearwire's stock falls doesn't necessarily mean it will hurt Clearwire, its to early to determine that. Its an opportunity for profit, for stock to be bought cheap, if they can find a way to raise its value tommorrow. Stockholder Investors suffering does not necessarilly mean Clearwire suffering. For this Split to be advantageous to WISPs, one of three things must occur... 1) Clearwire must suffer from severe financial harm. 2) Doubt in the Telco industry on viabilty of WiMax, because the failed partnership. 3) Clearwire or Sprint stock value must stay low. Sure the above may be likely, we can hope, and we can predict, but before we jump for joy, we need to see that the above actually occurs. I'd like to point out a DSL lesson on failure..... Remember Northpoint? Verizon started due diligence to purchase Northpoint, then gathered competitive information, and pulled out of the deal, made a public sceptacle, and watched Northpoint die from the repercussion of the tumbling stock. Yeah, if that happens, great for WISPs. >What would they be buying? >The technology wouldn't be compatible, from billing to the wireless >transmission system to the frequency bands. They could just as easily buy >the names and addresses for homes in an small-WISP area and send > sales/marketing incentives out. That I disagree with. In most "traditional" evaluations that I have seen, very little value gets given in consideration for "Equipment Infrastructure". The intent would be to replace equipment. Nor does "sales/marketing" guarantee new subscribers. What a WISP sells is Time to Market advantage to Prevent Burn rate. This is not necessarilly, customers, this also can be relationships and contractual agreements. WISPs offer an abilty to profit from otherwise lost opportunity, the revenue lost, until customers convert. I believe that over 50% of the first years revenue from a subscriber is goes towards recovering "sales/marketing costs". Converting customers over, with a full replacement of gear, gaining efficiencies of bypassing the sales/marketing process, is at miniumum adding a 6x month revenue to a WISPs evaluation, and thats a minimum assuming Clearwire thought they could win the business on their own without underbidding. Requirement to underbid to win business, would even escalate the Value of the WISP, considering the higher monthly revenue that could be achieve for many years down the road, at proven higher prices. Then there are agreements with Landlords. Property owners are the barrier to entry to tenant buildings. Even if they thought WISP's agreement would not hold up... Buying a WISPs existing agreements would save years in cost legal negotiations. Not to mention every dollar a WISP pay for an agreement, a landlord would try and negoatiate 4 dollars from a well funded Telco. Sure with the Non-Line of Site vision, this may not appear to apply, but is the "non-line-of-sight" vision a reality? A Clearwire does not need to buy a WISP to enter a market. But Clearwire could be more profitable, if they do. If Clearwire does not buy WISPs, it is not because it wouldn;t be advantageous to them, it is because they would jsut consider it a distraction because the dollar value of the typical WISPs operations today have not gotten large enough to justify the time. That is where consolidations would help WISPs. As WISPs consolidate, they grow to larger sizes becoming attractive for aquisition. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "Todd Easterling" <[EMAIL PROTECTED]> To: "'WISPA General List'" <wireless@wispa.org> Sent: Friday, November 09, 2007 1:19 PM Subject: RE: [WISPA] Sprint and Clearwire scrap WiMax deal > For the record, everyone in the WISP business (manufacturers and WISPs) I > talk to about the collapse of the Sprint-Clearwire deal is jumping for joy > about the news. I am too. WISPs do not need more competition, and a > "national WISP" like clearwire which added 49,000 new subs in the quarter > ended September 30, 2007 is clearly competition. Their market coverage > increased from 34 markets last quarter to 48. > > Yes, it is unlikely that a satisfied WISP customer would switch to > Clearwire. But what we are talking about is competition for new customers. > And anything that slows down a "national WISP" that picked up 49,000 new > subs in one quarter is good for the small business-WISPs and the smaller > manufacturers that supply those WISPs. Also, Clearwire isn't likely, in my > opinion, to care about buying most small WISPs. What would they be buying? > The technology wouldn't be compatible, from billing to the wireless > transmission system to the frequency bands. They could just as easily buy > the names and addresses for homes in an small-WISP area and send > sales/marketing incentives out. > > If Clearwire went away tomorrow, small WISPs, WISP distributors and WISP > product manufacturers would be far better off. > > Todd > > > ________________________________________ > > Todd Easterling > > VP, Corporate Development & Marketing > > Solectek Corporation > > www.SOLECTEK.com > > > > > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On > Behalf Of Tom DeReggi > Sent: Friday, November 09, 2007 8:55 AM > To: WISPA General List > Subject: Re: [WISPA] Sprint and Clearwire scrap WiMax deal > > I'm not sure it is an issue of Clearwire "over-evaluation". > I personally think it was just a publicity stunt to bring in some new cash > last quarter, for both companies. > > Clearwire and Sprint each own 2.5G spectrum, and its equally worth what it > is worth. > The real issue is whether someone is willing to pay what its worth, to > just > deliver WiMax, and share the profits? > Companies realize that sometimes they are better off just concentrating on > what they do best, and take 100% of the profit on the Business model that > they have proven to be Solid. > Sprint's mobile division has a clear business model that makes sense, > around > > the EVDO 3G/4G mobile data products. Sprint's business broadband division > has a clear business model around Fiber Optics. Sprint's Long distance > division has a clear model for selling bits nation/world wide. > But when it comes to WiMax, do they have a clear model that will benefit > them? > Its all about EGO and public perception, and Tier1 carriers do not like > someone else getting the Spotlight, its just not good for Investor > Relations. > > Personally, I believe it will help WISPs more, for Clearwire to succeed. > It > will likely set a record of high evaluation for the industry. > Public perception will be... If Clearwire can't do it, and isn't worth it, > how can a WISP be? > > I'll make an unpopular statement that I feel is just plain reality, and > the > reason Telcos are not likely going to be real competition for WISPs or > vice > versa. > The Wireless business is for scavengers and bottom feeders. Any way you > slice it, for a WELL FUNDED Mammoth company, Fiber Optic will ALWAYS be a > better business proposition for the PROVIDER, whether talking about > business > > or residential. And for Mobility, 3G and 4G already delivers enough > capacity for MOST applications, that are guaranteed success business > models > for mobility. Sprint knows this, which is why there is Internal turmoil > within Sprint, on whether to WiMax or Not. This press release is NOT an > announcement of failure and bad news, it is an announcement that Sprint > has > common sense, and back to reality. > > As far as the Fixed Wireless business and WISPs.... Our industry has many > clear business models. And our technology doesn't need to be the "BEST", > for us to have successful business models. "WiMax or Equivellent" is an > enabler technology, to enable small entrants to enter the game and play > ball. In comparison to Sprint market share, its a tiny tiny playing > field. > But thats OK, in comparison we are tiny tiny providers. There are many > advantages to being small. And small things still have great potential > proportionaly. On my playing field, the big boys don't have an advantage > over me. I (along with WISPs nationwide) will continue to kick Telcos' > butt, on our Fields. My customers will continue to get better value, and > WISP will continue to succeed. If Telcos are smart, they'll never play > ball > > on our fields, there is just no need to play a game that they will loose > at. > > Telcos have a much larger playing field, where they are guaranteed to > shine. > > As far as Clearwire, and same goes for companies like Fiber Tower.... If > they are smart, they will start buying smart WISPs. The mentality that > they > > will come and just take the customers and take the market is just not a > reality. There are just to many reasons that Subscribers have selected > their > > local WISP. As long as WISPs are in the game, we are a threat to them > being > > recognized as the definitive "wireless" provider, and their business > model. > WISPs in the market will devalue the market, because WISPs sell cheap > because they can. So in return Clearwires or equivellent also undersell > at > a loss, to be competitive. The only way to beat WISPs, is to buy their > customers, and convert them, and take the savy ambitious WISP executives > out > > of the game. A telco is much more likely to buy a Clearwire, if Clearwire > is in markets where they have extinguished other competition. Because then > they have a market for sale, not just a provider. WISPs are still > considered > > a problem, that telcos are figuring out how to deal with. They are afraid > WISPs case studies will become the venue for next generation CLEC/ISPs. If > Clearwire killed the threat by buying them, and transferred the leverage > to > Clearwire, at the same time as increasing market share, it would help > their > evaluation. The truth is... a company like Clearwire would IMMEDIATELY > obtain cost savings through the aquisitions, such as via consolidating > backhauls, and be able to raise prices. Sure I recognize that Clearwire > Egos have likely not realized this yet, but give it time. The value of > WISPs is not just their customers, its their relationships, whether it be > with customers or real estate/property owners. > > Mark my words.... In two years, Clearwire will either be bankrupt, or they > will be one of the major consolidators, BUYING up local WISPs. > > Just my 2 cents. > > Tom DeReggi > RapidDSL & Wireless, Inc > IntAirNet- Fixed Wireless Broadband > > > ----- Original Message ----- > From: "Brad Belton" <[EMAIL PROTECTED]> > To: "'WISPA General List'" <wireless@wispa.org> > Sent: Friday, November 09, 2007 9:20 AM > Subject: RE: [WISPA] Sprint and Clearwire scrap WiMax deal > > >> Wow, already down 30%+ this morning. Hate to say I told ya so (not your >> Frank, but the list in general) on the over-valuation of Clearwire, but I >> told ya so. >> >> Best, >> >> >> Brad >> >> >> >> -----Original Message----- >> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On >> Behalf Of Frank Muto >> Sent: Thursday, November 08, 2007 11:36 PM >> To: WISPA General List >> Subject: [WISPA] Sprint and Clearwire scrap WiMax deal >> >> Sprint and Clearwire scrapped a pact to build a nationwide high-speed >> wireless network based on WiMax. >> >> http://online.wsj.com/article/SB119457536653487513.html >> >> The two companies signed a letter of intent in July to pursue the >> partnership, which they hoped to finalize within 60 days. >> But the complexities of the transaction and the departure last month of >> Gary >> Forsee as Sprint's chief executive officer made >> it too difficult to reach a final pact, the people say. >> The unraveling of the preliminary agreement is a blow to Clearwire. The >> company, founded by cellphone pioneer Craig McCaw, >> has staked its future on WiMax, a longer-range cousin of Wi-Fi that can >> theoretically provide wireless broadband access from >> laptops and cellphones at speeds comparable to what cable operators >> provide. >> >> >> >> Frank Muto >> President >> FSM Marketing Group, Inc >> www.secureemailplus.com >> >> >> >> >> >> >> >> >> >> >> > ------------------------------------------------------------------------ ---- >> ---- >> WISPA Wants You! Join today! >> http://signup.wispa.org/ >> > ------------------------------------------------------------------------ ---- >> ---- >> >> WISPA Wireless List: wireless@wispa.org >> >> Subscribe/Unsubscribe: >> http://lists.wispa.org/mailman/listinfo/wireless >> >> Archives: http://lists.wispa.org/pipermail/wireless/ >> >> >> >> > ------------------------------------------------------------------------ ---- > ---- >> WISPA Wants You! 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